To enable 10 000 Québec SMEs to benefit as much as possible from e-commerce, Deputy Prime Minister and Minister of State for the Economy and Finance Bernard Landry announced, in the 2000-2001 Budget Speech, the introduction of a refundable tax credit equal to 40% of the expenses incurred for the development of a transactional web site. Assistance of up to $40 000 per corporation may be granted.
Q. |
What are eligible e-commerce solutions? |
A. |
Eligible solutions include a transactional web site that uses the open network (Internet), a limited-access secure and confidential open network (extranet), or a business-to-business transactions system as part of a closed network. Such e-commerce solutions must include a transaction mode by secure computerized channels. |
|
|
Q. |
Which enterprises are eligible for the program? |
A. |
In general, any corporation that operates a business established in Québec with assets of less than $12 million or gross income of less than $25 million. For calculation purposes, data from the preceding taxation year will be used. |
|
|
Q. |
When can a corporation start claiming the refundable tax credit? |
A. |
Beginning March 15 of this year, a corporation will be entitled to claim this credit for eligible expenses incurred after March 14, 2000 and before April 1, 2002. Transitional rules exist for expenses incurred between March 31, 2002 and October 1, 2002. |
|
|
Q. |
Which conditions must be met in order to claim this tax credit? |
A. |
The corporation must duly complete the form prescribed by the ministère du Revenu and enclose it with its tax return. It will enjoy almost immediate benefits, since the credit will be applied against any tax instalments the corporation may be required to make for income tax and the tax on capital. |
|
|
Q. |
Can a business that already has a web site which does not qualify as an eligible e-commerce solution claim the refundable tax credit in order to make it eligible? |
A. |
Yes. The expenses incurred must enable the web site to qualify as an eligible e-commerce solution. |
|
|
Q. |
Which expenses are considered eligible? |
A. |
In general, eligible expenses include salaries and the cost of acquiring application software for inclusion in the eligible e-commerce solution as part of its implementation. However, certain types of expenses are not eligible. |
|
|
Q. |
Can a corporation that has work performed by a third party claim the refundable tax credit? |
A. |
Yes. If a contract is given to a third party, a corporation wishing to incorporate an e-commerce solution can claim the refundable tax credit for that portion of the fees paid to have the contract carried out. Rules have been established to determine the portion for which the tax credit can be claimed. |
|
|
Q. |
Can expenses be claimed over more than one taxation year? |
A. |
Yes. However, the refundable tax credit is limited to a cumulative maximum of $40 000. |
|
|
Q. |
What is the cost of the program? |
A. |
Funding of $126 million is being allocated over the next three years. |